Team siliconindia

• US 50% tariff could hit Indian exports worth over USD 48 billion, affecting textiles, pharma, gems, electronics, and more.
• Chamber urges PM Modi to impose retaliatory tariffs and reduce dependence on US imports.
• Traders face uncertainty over goods in transit and rising costs for American buyers.

The Chamber of Trade and Industry (CTI) has written to Prime Minister Narendra Modi, warning that the United States’ 50 percent tariff on Indian goods could severely impact key industries and threaten the livelihoods of lakhs of people in the country.

CTI Chairman Brijesh Goyal said the tariff hike could devastate sectors including textiles, leather, gems and jewellery, auto components, chemicals, pharmaceuticals, seafood, electronics, and engineering goods. “Indian products will become up to 35 per cent costlier in the US market compared to competitors, prompting buyers to seek alternatives”, he noted.

According to CTI, the tariff increase could affect exports worth more than USD 48 billion. Engineering goods, which saw exports of Rs. 1.7 lakh crore last year, are expected to take a major hit. Gems and jewellery exports worth Rs. 90,000 crore, along with India’s growing electronics shipments, are also under threat.

Previously, some products faced a 10 percent duty in the US, but the new tariff of 50 percent will drastically increase costs for American buyers. Pharmaceutical exports, valued at Rs 92,000 crore last year, will also face hurdles. Medicines that earlier entered the US duty-free will now be 50 percent more expensive, placing Indian pharma companies at a disadvantage compared to competitors such as Vietnam.

In his letter to the Prime Minister, Goyal urged India to respond firmly to the US move. He recommended imposing retaliatory tariffs on American goods and reducing dependence on US imports, including minerals, precious stones, metals, aircraft equipment, plastics, and chemicals.

“India should not be afraid of this pressure”, Goyal said. “We should explore new markets such as Germany, the UK, Singapore, and Malaysia, where demand for engineering goods is rising. Counter-tariffs are necessary to teach the US a lesson”.

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CTI General Secretaries Rahul Adlakha and Rajesh Khanna highlighted that India’s exports to the US include 53 percent pharmaceuticals, 53 percent textiles and apparel, 37 percent gems and jewellery, 28 percent auto components, 13 percent chemicals, and 22 percent seafood.

They also noted confusion among traders about how the new tariffs will affect goods already shipped or in transit, as no guidance has been issued by the US administration. 

The US tariff decision, effective August 27, comes on top of a 25 per cent duty already imposed since August 7, adding further pressure on Indian exporters.